No rink for Chelsea, Quebec Meredith Centre

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by mark b on July 22, 2010

After months of waiting, the Meredith Centre is starting to take shape – albeit different from the form that many in Chelsea had envisioned more than a year ago. The centre is going ahead as a double gymnasium and a community centre, with the arena relegated to a “later phase” – dependent on more grants from upper levels of government.

The decision was made based on a report by consultant Clem Pelot, who analyzed the MC business plan to determine how it could still break even if one of the three original components were discarded. The centre had to be scaled back after it was discovered last March that it would cost an additional $1 million plus to stabilize the soil at the planned Old Chelsea Road site.

Mayor Caryl Green said the decision was “quite straightforward” as it came down to capital costs. She said the Request for Proposals (RFP) for the centre’s design-build contract will go out July 22 to the five companies whose bids were pre-approved last winter. The companies will be asked to design the Meredith Centre with the possibility of adding an arena.

“It will be an integrated design including a future arena,” Green said.

In the meantime, she said, there could be an outdoor skating facility that doubles as basketball courts in the summer.

Although Green said funding for the arena would have to be addressed with other levels of government, Chelsea Foundation President Wayne Russell said there are no plans to try to finance an arena during the next few years.

“There’s not an overwhelming desire to have an arena,” he said.

The revised MC sidelines the arena component in favour of a full-size double gym and community centre. The latter will be marketed as a mini-conference facility, complete with six multi-purpose and meeting rooms. Both the Chelsea Co-operative Nursery School and A Step Up Gym, a Chelsea fitness establishment, will move into the new centre.

While gym and conference bookings are expected to increase each year, Pelot sees children’s camps as the centre’s cash cow, generating over $100,000 in annual revenue.

The report predicts a first-year loss, with the centre breaking even after its second year before reaping a third-year surplus that will pay off the first year’s debt.

Green said the centre could cost less than the original $9.8 million, depending on the five construction company bids.

“It could be well under, but we won’t go over,” she said.

Russell said he would be surprised if the cost came in under the $9.8-million tab.

Sheldon Weatherstone, a chartered accountant who teaches at the University of Ottawa’s Telfer School of Management, and President of the recently-formed Chelsea Citizens Association, called Pelot’s analysis “superficial.” Weatherstone said there isn’t a lot of detail to validate some of the original business plan assumptions and to see whether they still stand.

“What concerns us more than anything else is that the projected costs of the Meredith Centre haven’t been changed,” he said, referring to the same $9.8-million price tag for the scaled-down version.

Weatherstone thinks it would be “responsible” to return to the community with the new plan, since the centre is different from what was voted for in the June 2009 referendum.

“I don’t know what the population wants anymore, so I don’t know how (council) would know,” he said.

Richard Hofer, a self-employed management consultant with extensive experience in project finance, also criticized the report. The former “No” referendum campaigner said the report doesn’t provide an “original, careful rethinking of the business plan,” which he said “would be regarded as absolute rubbish” by anyone in finance or business.

“None of (the business plan) stood up to any serious scrutiny, which is the reason I got involved in the Meredith centre in the first place,” Hofer said.

He isn’t convinced business people would prefer holding their conferences “in the middle of a field in Chelsea” over having them at the Wakefield Mill or Le Nordik. He said the larger issue isn’t whether the centre can lure weddings from Les Fougeres or gym rentals from Chelsea Elementary School – it’s whether it’s a good idea.

Hofer doesn’t believe that residents today would vote for a $9.8-million gym and conference centre when there are “real problems” in Chelsea, such as a doctor shortage and lack of seniors housing.

The new community centre in Wakefield, meanwhile, is slated to cost $4.9 million.

Green said public meetings to discuss the MC will be held in September, when residents residents are back from summer holidays, although she’s made it clear there won’t be another referendum. Another meeting to present the new design will be held later in October, after the contract is awarded.

Green said the RFP contains a clause stating that the contract is dependent upon Chelsea receiving the $6.1 million in federal and provincial funding, which still hasn’t been secured, for the facility. She hopes work on the site could begin this fall, with fall 2011 as a possible completion date.

Clem Pelot’s report is available on the municipal website at www.chelsea.ca.